Assure adds 120 medical centres to its portfolio – Assure (AGR) has released its results for the year to 31 March 2018.
Assura is a constituent of the FTSE 250 and the EPRA indices and is a UK REIT and long-term investor in and developer of primary care property. The company works with GPs, health professionals and the NHS to create property solutions in order to facilitate delivery of high quality patient care in the community. At 31 March 2018, Assura’s property portfolio was valued at £1,733 million.
The company reported a 4.2% increase in EPRA EPS to 2.5p (2017: 2.4p) The company’s profit before tax was £71.8 million (2017: £95.2 million). This reduction reflected the net impact of the £56.4 million early repayment costs of loans from Aviva. In January 2018, the proceeds from the December equity raise of £310.7 million were used, in part, to repay the remaining £211 million of long-term loans held by Aviva Commercial Finance, with associated repayment costs of £56 million.
The dividend increased by 9.1% to 2.455p (2017: 2.25 p)
Assura added 120 medical centres to create a portfolio of 518 properties at the year end. This is an addition of £314 million to its property portfolio. The UK primary care market remains highly fragmented with approximately 9,000 medical centres and so the company has a market share of around 6%.
Highlights
Continued growth of the portfolio
- 28.8% increase in investment property to £1.7 billion (2017: £1.3 billion)
- 6.3% growth in diluted EPRA NAV per share to 52.4 pence (2017: 49.3 pence)
- 22.3% increase in rent roll to £91.0 million (2017: £74.4 million)
- Current LTV of 26% (2017: 37%) giving Assura headroom for future investment
Strengthened balance sheet enabling reduction in cost of debt
- Over £400 million, gross of expenses, raised from equity placing in June 2017 and share issue in December 2017
- Weighted average cost of debt reduced by 94 bps to 3.12% (March 2017: 4.06%)
- £211 million of Aviva debt repaid in January 2018
- Unsecured revolving credit facility increased to £300 million at initial margin of 150 bps
- £150 million notes in two tranches privately placed in October 2017, weighted average coupon 3.04%, maturities of eight and ten years
Outlook from Simon Laffin, non-executive chairman
“Assura has the strongest balance sheet in the sector and we are well placed to continue investing in primary care property, which remains a very fragmented market. In addition, we remain focused on carefully managing our existing portfolio with our in-house management team striving to deliver the highest standard of customer service and operational excellence for the nation’s GPs, while also maximising the value of our portfolio through asset management initiatives.
Although the policy consensus across all mainstream parties to increase emphasis and investment in primary care is more positive now than ever before, we remain frustrated by the slow progress in transforming policy into meaningful investment. Everyone seems to agree that better healthcare hinges on more care being provided in the primary sector. Having more doctors and better leveraging their expertise through ancillary healthcare professionals will require more and better premises. We stand ready to support this essential investment in NHS infrastructure by offering a powerful combination of the right skills, relationships and capital to make such plans a reality on the ground.“
Outlook from Jonathan Murphy, CEO
“The political agenda continues to be dominated by Brexit, but in its 70th anniversary year, the NHS is one of the few domestic issues managing to secure meaningful debate. The Prime Minister has publicly accepted the need for a long-term funding settlement for the health service, and MPs from all parties are working together on potential solutions. Assura firmly believes in the NHS. Regardless of the politics, the fundamentals for primary care estate will remain steadfast: to reduce pressure on hospitals, improve access to general practice and help the people who rely on health services the most to reach them closer to home. GP surgery buildings and primary care premises must be fit for the future. “
ASS : Assure adds 120 medical centres to its portfolio